(Bloomberg) -- Credit Suisse Group AG, the second- biggest Swiss bank, reported a slump in first-quarter earnings as a drop in debt trading weighed on investment-banking profit.
The stock tumbled as much as 2.8%in Swiss trading after Credit Suisse said net income fell 34% to 859 million francs ($976 million) from a year earlier, missing the 1.09 billion-franc estimate of analysts surveyed by Bloomberg.
Credit Suisse followed New York-based JPMorgan Chase & Co. and Citigroup Inc. in posting lower revenue from bond trading. Earnings at the Zurich-based bank missed estimates for a third straight quarter even as its wealth management business beat forecasts, prompting some analysts to question Chief Executive Officer Brady Dougan’s plan to stick with debt trading.
“The results today are disappointing,” JPMorgan analysts Kian Abouhossein and Amit Ranjan said in a note. “We are more concerned about the long-term investment bank strategy of Credit Suisse,” they said, adding that the bank should shrink its fixed-income business further.
Credit Suisse declined 2.1% to 27.25 francs by 2:42 p.m. in Zurich, valuing the company at 43.5 billion francs. The bank is valued lower than Zurich neighbor UBS AG and the gap has widened since the latter’s decision in 2012 to exit most debt trading, data compiled by Bloomberg show.
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